automotive

Finbarr O'Neill On Building Up A Stressed Brand

Finbarr O'Neill It is an understatement that bankruptcy and closing dealerships will make it harder for GM to get consumers to consider buying its cars and trucks. For instance, can a bankrupt automaker honor vehicle warranties?

President Obama made the point in his speech Monday about GM's transformation into a company 60% owned by taxpayers. He noted that GM warranties -- now government-backed -- should give consumers who are considering a visit to a GM showroom confidence, not pause.

If anyone can comment on how to build sales and improve the reputation of a brand under duress, Finbarr O'Neill, president of J.D. Power & Associates, can.

O'Neill faced similar issues when he was president and CEO of Hyundai Motor America between 1998 and 2003. Past board chairman of the Association of International Automobile Manufacturers, Automotive All-Star winner, and the Brandweek 2001 Marketer of the Year, O'Neill pulled Hyundai out of a nosedive in the late '90s with marketing focused on a 10-year, 100,000-mile warranty that got people into showrooms as the company was finally getting the right vehicles to the U.S. market.

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Marketing Daily had a chat with him on Monday.

Q: Do you see similarities between Hyundai Motors in the late 1990's and GM now, in terms of showroom challenges?

A: Yes, I think that both situations involve brands that have to overcome resistance from consumers. Though General Motors has a serious situation with its bankruptcy, I expect that it will go smoothly.

I found the president's statement reassuring. Not only does he back the warranty, but he's asking Congress to initiate a fleet modernization act involving a tax credit for those who buy higher-mileage vehicles. I thought his tone was reassuring, and should give people confidence.

Q: The President suggested that Chrysler's sales bump in May means consumers have not been scared off by Chrysler's bankruptcy. Does Chrysler's May sales performance count as a bellwether?

A: It's too early to tell. We have seen that surge in our PIN [Power Information Network] data, but you have to ask if some of that is because of their aggressive pricing. I think the real issue is what's happening down the road after they emerge from bankruptcy. GM and Chrysler have different challenges. General Motors has a fairly solid pipeline of new products; Chrysler has to make Fiat work for them on the brand side.

Q: How should General Motors engage consumers? Should GM spend time and money on corporate messages about the "New GM" or focus messages on the remaining brands [GMC, Buick, Cadillac and Chevrolet]?

A: One of the things I found when we turned Hyundai around is there really is no one solution; it wasn't just the warranty. At the end of the day, it's about product -- successful launches of new product that Americans are excited about and want to buy.

I would agree they also need to concentrate on differentiating the four remaining brands, making sure each has its own space in terms of market segment. One of the challenges with eight brands was overlapping products; [having only four brands] will allow them much more focus. What is Chevrolet; what is GMC; what is Cadillac?

Yes, they should have corporate messaging about the resurgence of the company, but the message should really be on those four brands. Eventually, there must be much more clarity around the brands so you won't be wondering what the differences are; you won't be asking, "What's the difference between Chevy and Pontiac?"

Q: So focus on the brands, not on trying to make the "New GM" the consumer brand.

A: That's essentially correct. I think there is a certain level of corporate messaging around reassurance, but the real focus should be differentiation: the brands and what they mean. And I think that in a four-brand portfolio, you will see a lot more of that clarity at GM. If GM's bankruptcy goes as smoothly as Chrysler's appears to have, I expect GM to be judged on the quality of their product. Ultimately, the judge will be the American people.

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